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Health insurance rates drop for individuals, rise for small employers

Star Tribune (Minneapolis, MN)

Oct. 02--Average premiums across the individual market will be on the decline next year, state officials said Tuesday, with reductions from the four largest carriers in the market ranging from 7.4 percent to 27.7 percent.

The discounts amount to the latest sign of stability in the individual market, which for several years was plagued by premium spikes under the federal Affordable Care Act (ACA). About 155,000 Minnesotans currently are buying individual coverage, where those who don't get coverage through their employer can purchase on the state's MNsure exchange or directly from some carriers.

Rates will be rising 3 percent to 12 percent for large carriers in the small group market, state officials said, but the individual market continues to garner more attention as the Trump Administration promotes ACA alternatives and state lawmakers consider whether to keep spending taxpayer funds to shore up the non-group market.

"We do think it's really important that the new governor and the Legislature take a really hard look at how to continue to provide the state support necessary for a stable individual market," said Jessica Looman, the state Commerce Commissioner, during a news conference at the State Capitol.

Minnesota provided premium rebates for people buying individual market coverage in 2017. In 2018 and 2019, the state is spending $541 million on a reinsurance program that helps keep premiums low by covering some costs for people in the market with unusually high medical costs.

"On average, rates are going down in the individual market because of lower utilization rates, lower costs for service, Minnesota's reinsurance program and a strong Minnesota economy," Looman said.

The magnitude of individual market premium changes will vary by carrier, including average declines of 7.4 percent at HealthPartners, 9.98 percent at UCare, 12.4 percent at Medica, and 27.7 percent at the HMO run by Blue Cross and Blue Shield of Minnesota. Actual rate changes for individuals will vary depending on the particular plans, Commerce says, as well as a consumer's age and place of residence.

Looman noted that premium declines for 2019 follow a 2018 rate release that also featured flat or declining premiums, depending on the carrier. The declines for 2019 are generally bigger, however, and apparently have a wider geographic reach.

In 2018, the "benchmark" premiums declines across much of the state, but they increases in southeast Minnesota, where employers have long complained about higher health costs in a regional health care market led by the Mayo Clinic.

The data release Tuesday from Commerce, however, shows that benchmark premiums will decline in every county. Consumers in greater Minnesota will continue to pay higher premiums that people in the Twin Cities metro, but greater Minnesota consumers are seeing bigger discounts in terms of dollars spent for the "benchmark" health plan.

A 40-year-old nonsmoker in Hennepin County will pay $300.01 per month next year for the benchmark health plan, a decline of $27.21 or 8 percent. In St. Louis County, a 40-year-old nonsmoker buying the benchmark health plan will pay a monthly premium of $331.97, a decline of $93.73 or 22 percent. In Olmsted County, the 40-year-old nonsmoker will pay $483.33 per month at the benchmark, a decline of $113.39 or 19 percent.

"The second-lowest priced silver plan available through MNsure for a given county is called the 'benchmark plan,'" Commerce said in background materials. "The price of the benchmark plan is used to calculate the federal tax credit that reduces monthly premiums for eligible individuals and families."

Open enrollment for individual market shoppers begins Nov. 1 and stretches through Jan. 13. As of July, about 100,000 individual market consumers were buying through MNsure, where about two-thirds of enrollees tap federal tax credits to discount premium costs.

Individuals earning up to $48,560 per year, or a family of four earning up to $104,000 per year, could qualify for the subsidies. Nate Clark, the MNsure chief executive, said in a statement: "MNsure is the only place consumers can receive tax credits, and all plans available through MNsure offer comprehensive coverage that covers pre-existing conditions."

Beginning in 2014, the ACA stopped carriers from denying coverage to people in the individual market based on pre-existing health problems. The law also called for the creation of government-run health insurance exchanges like MNsure plus tax credits that would be made available through the exchanges.

After several failed attempts last year by Republicans in Congress to repeal the ACA, the Trump Administration this year has adopted rules that in some states will let individuals bypass ACA markets and purchase short-term limited duration health plans that likely will feature lower premiums and skimpier coverage. Looman said the short-term plans likely won't make a big difference in Minnesota's individual market, because the new rule doesn't override an existing state law that limits the duration of short-term coverage to six months.

For small employers, average premiums will increase next year, but Looman said the market continues to be stable and will provide single-digit premium increases for most. The market had been shrinking for more than a decade before seeing a sudden rebound in enrollment last year to about 310,000 people, likely because consumers were fleeing premium jumps in the state's individual market.

The small group market in 2019 will see more competition with the entrance of Minnetonka-based UnitedHealthcare.

"About three percent of Minnesotans buy their health insurance coverage in the individual market, which is for people who do not have coverage through their employer or public programs like Medicare, Medicaid and MinnesotaCare," Commerce said in a statement. "About 5.5 percent of Minnesotans receive their health insurance coverage through the small group market, which offers coverage for businesses and organizations with 2 to 50 full-time employees."